Flint moves closer to getting emergency manager

LANSING (AP) — State officials on Tuesday moved closer to approving an emergency manager to oversee Flint’s finances after a review team unanimously found that a financial emergency exists in the city.

Gov. Rick Snyder agrees with the findings of the financial review team, Treasury spokesman Terry Stanton said. The appointment of an emergency manager is “not an immediate next step, but it’s a possibility,” Stanton said.

The decision by the administration to release the report nearly three hours before the polls closed in Flint’s city elections was blasted by Michigan Democratic Party Chairman Mark Brewer, who called the move “despicable and clearly politically motivated.”

“Earlier this year, the governor chose to pass on the state’s financial problems to local communities like Flint by cutting their revenue sharing by 50 percent,” resulting in $8 million less for the city, Brewer said in a statement. “Was there any question that that type of cut would have a negative impact on the city’s finances?

“Snyder, Treasurer (Andy) Dillon and the Republicans should be ashamed of themselves for creating a false emergency like this for their own political gain.”

Snyder spokeswoman Sara Wurfel countered that “this decision and timing was the farthest thing possible from being politically motivated.”

She said Snyder had hoped to avoid having the state appoint an emergency manager in Flint, but the independent review team found that no satisfactory plan existed to resolve the city’s deep financial troubles.

“The governor has been deeply committed to Michigan’s urban areas, especially Flint, from day one,” Wurfel added in an email. “Not only has he created an Office of Urban and Metropolitan Initiatives but specifically in Flint helped launch a public safety sweep and longer-term initiative to help reduce crime and protect citizens. ... The city’s fiscal woes have long been-known.”

Snyder and the GOP-controlled Legislature passed a 2011-12 budget that cut nearly $100 million from revenue sharing given to local governments as of Oct. 1. Snyder also required local governments to propose ways to cut spending and consolidate public services to share in $100 million of the remaining $200 million in revenue sharing offered through state law. Local governments also share $660 million in payments required by the state constitution.

The Flint review team’s report found that city officials had transferred funds from the water department to shore up city finances, even though the water department had an estimated $9 million deficit this year. It also found the general fund last year had borrowed money from funds set aside for sewage disposal, local streets, public improvements and self-insurance and needed to borrow $8 million recently through bonds to deal with cash flow shortfalls.

Flint Mayor Dayne Walling issued a statement saying city officials had been stymied in solving the city’s fiscal problems.

“The state’s decision shows how serious our financial challenges are in the city of Flint,” Walling said. “Significant progress has been made to stabilize the city’s finances during a very difficult economy, but without shared sacrifice across the board, the city has not been able to implement all of the necessary cost savings.”

In August, Michigan officials ordered a preliminary review of Flint’s finances, the first involving a Michigan city since the state revised its emergency manager law this year. Michigan already has emergency managers in place in the Detroit public school system as well as the cities of Pontiac, Ecorse and Benton Harbor.

Snyder has said the emergency manager law is needed to help struggling cities get back on their feet. But opponents who dislike that the law say it gives emergency managers sweeping powers to throw out union contracts and replace elected officials. They are trying to collect enough signatures to get the law on the ballot, where they hope voters will repeal it.

Last week, the state-appointed emergency manager for the city of Pontiac fired the city’s clerk, attorney and director of public works in what he called a City Hall realignment. His financial plan calls for raising property taxes, making the city’s fire department part of the Waterford Township Fire Department and merging or privatizing other city offices. On Tuesday, some Pontiac elections workers didn’t show up to work at the polls after the clerk’s firing.